SEC News Digest

Issue 2012-30 February 14, 2012

Enforcement proceedings

Investment Adviser Sanctioned

Investment adviser Gualario & Co., LLC, and its owner, Ronald Gualario (Gualario), have been sanctioned following a hearing before an administrative law judge. They were ordered to cease and desist from violations of the antifraud and registration provisions of the securities laws, to disgorge ill-gotten gains of $492,249.67, and to pay a civil money penalty of $390,000. Additionally, Gualario was barred from association with any broker-dealer, investment adviser, or investment company.

The law judge found that Gualario & Co., LLC, and Gualario violated the antifraud provisions by making material misrepresentations and omissions in the sale of promissory notes to investors and in the operation of a hedge fund. Additionally, they acted as unregistered brokers. (Initial Decision No. 452; File No. 3-14340)

In the Matter of Dustin D. White

The Commission issued an Order Making Findings and Imposing Remedial Sanctions Pursuant to Section 15(b) of the Securities Exchange Act of 1934 (Order) against Dustin D. White of Mesa, Arizona, who previously resided in Colorado Springs, Colorado. White consented, without admitting or denying the Commission’s findings except as to the Commission’s jurisdiction and to the entry of the previous injunction, to be barred from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization; and barred from participating in any offering of a penny stock, including: acting as a promoter, finder, consultant, agent or other person who engages in activities with a broker, dealer or issuer for purposes of the issuance or trading in any penny stock, or inducing or attempting to induce the purchase or sale of any penny stock.

On August 31, 2011, a final judgment was entered enjoining White from violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder in a civil action entitled Securities and Exchange Commission v. Wellco Energy LLC, et al., Civil Action Number 1:09-CV-1114 (D. Colo.). In the Order, the Commission found that the complaint in the civil action alleged that in connection with White’s sales of fractional undivided interests in oil and gas rights, he misrepresented that Wellco Energy LLC was the operator of the four oil and gas projects. The complaint also alleged that, in fact, Wellco did not operate the projects and instead purchased fractional undivided interests from another company, which interests it further divided and resold to investors. The complaint further alleged White misrepresented that Wellco’s principal, Justin William Rifkin (Rifkin), had extensive experience operating oil and gas prospects. In fact, the complaint alleged, Rifkin’s experience was limited to raising money through sales of other companies’ oil and gas projects, and he had no experience operating oil and gas wells. The complaint further alleged that, in connection with White’s offers and sales, he made misrepresentations about how investors’ funds would be used, and did not tell investors that he would receive a twenty percent commission. The complaint also alleged that White sold securities when no registration statement was filed or in effect with the Commission. The complaint further alleged that White was not registered or associated with a broker or dealer during the time when he offered and sold the securities at issue in the case.

Investment company act releases

Pacific Life Insurance Company, et al.

A notice has been issued giving interested persons until March 9, 2012 to request a hearing on an application filed by Pacific Life Insurance Company, et al. for an order under Section 12(d)(1)(J) of the Investment Company Act of 1940 (Act) for an exemption from Sections 12(d)(1)(A) and (B) of the Act, under Sections 6(c) and 17(b) of the Act, for an exemption from Section 17(a) of the Act, and under Section 6(c) of the Act for an exemption from Rule 12d1-2(a) under the Act. The order would permit (a) certain series of registered open-end management investment companies to acquire shares of other registered open-end management investment companies or unit investment trusts that are within or outside the same “group of investment companies,” as defined in Section 12(d)(G)(ii) of the Act, as the acquiring companies and (b) certain series of registered open-end management investment companies relying on Rule 12d1-2 under the Act to invest in certain financial instruments. (Rel. IC-29944 - February 13)

Self-Regulatory Organizations

Immediate Effectiveness of Proposed Rule Changes

A proposed rule change filed by NYSE Arca, Inc. (SR-NYSEArca-2012-13) amending the NYSE Arca Equities Fee Schedule to increase the Investor Tier 1 credit for ETP Holders and Market Makers has become immediately effective pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 13. (Rel. 34-66378)

A proposed rule change filed by NYSE Arca, Inc. (SR-NYSEArca-2012-11) amending the NYSE Arca Equities Fee Schedule increasing the indication of interest Tier 1 credit and the Tracking Order Tier 1 credit for ETP Holders and Market Makers has become immediately effective pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 13. (Rel. 34-66379)

A proposed rule change filed by the EDGX Exchange, Inc. amending its rules regarding registration, qualification and continuing education requirements for Authorized Traders of Members and recognizing the Series 56 exam (SR-EDGX-2012-04) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 13. (Rel. 34-66383)

A proposed rule change filed by NYSE Amex LLC to provide for “Self-Trade Prevention” on the Exchange (SR-NYSEAmex-2012-03) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 13. (Rel. 34-66385)

A proposed rule change filed by NYSE Arca, Inc. to provide for “Self-Trade Prevention” on the Exchange (SR-NYSEArca-2012-08) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 13. (Rel. 34-66386)

Proposed Rule Change

C2 Options Exchange, Incorporated filed a proposed rule change (SR-C2-2012-006) pursuant to Section 19(b)(1) of the Securities Exchange Act, and Rule 19b-4 thereunder, relating to its Automated Improvement Mechanism. Publication is expected in the Federal Register during the week of February 13. (Rel. 34-66384)

Securities Act Registrations

The following registration statements have been filed with the SEC under the Securities Act of 1933. The reported information appears as follows: Form, Name, Address and Phone Number (if available) of the issuer of the security; Title and the number and/or face amount of the securities being offered; Name of the managing underwriter or depositor (if applicable); File number and date filed; Assigned Branch; and a designation if the statement is a New Issue.

Amendments to the Registrant's Code of Ethics, or Waiver of a Provision of the Code of Ethics

5.06

Change in Shell Company Status

6.01

ABS Informational and Computational Material.

6.02

Change of Servicer or Trustee.

6.03

Change in Credit Enhancement or Other External Support.

6.04

Failure to Make a Required Distribution.

6.05

Securities Act Updating Disclosure.

7.01

Regulation FD Disclosure

8.01

Other Events

9.01

Financial Statements and Exhibits

8-K reports may be viewed in person in the Commission's Public Reference Branch at 100 F Street, N.E., Washington, D.C. To obtain paper copies, please refer to information on the Commission's Web site at http://www.sec.gov/answers/publicdocs.htm. In most cases, you can view and download this information by using the search function located at http://www.sec.gov/edgar/searchedgar/companysearch.html.